TSX rally fizzles on stimulus doubts
By Jon Cook
TORONTO (Reuters) - Canadian stocks' three-day rally ended on Monday, amid market concerns that any potential stimulus measures announced this week by central bankers in the United States and Europe may not be implemented right away.
Investors were given a shot of adrenaline last week when European Central Bank President Mario Draghi said the bank was ready to do whatever was necessary, within its mandate, to save the euro.
But some of the optimism for meaningful stimulus faded on Monday after ECB insiders said bold actions, including resuming ECB's bond-buying program and even pursuing quantitative easing, are at least five weeks away.
"Draghi's comments were positive, but no one is willing to bet the farm on any of these things happening," said Irwin Michael, portfolio manager at ABC Funds. "The market remains in 'Sleepy Hollow' mode -- no-one is doing anything."
Canada's resource-heavy Toronto Stock Exchange's S&P/TSX composite index .GSPTSE settled little changed, with half of its 10 main sectors ending lower.
Leading the declines were top oil producers Suncor Energy (SU.TO: Quote), down 1.6 percent at C$31.39 and Cenovus Energy (CVE.TO: Quote), which fell 1.3 percent to C$31.15. Top fertilizer maker Potash Corp (POT.TO: Quote) dropped 2 percent to C$44.98 and copper miner First Quantum Minerals (FM.TO: Quote) shed 1.9 percent at C$18.25.
Ivanhoe Mines Ltd (IVN.TO: Quote) slid 2.7 percent to C$8.54 after Rio Tinto Plc (RIO.AX: Quote) (RIO.L: Quote) said on Monday it paid about $935 million for 133.6 million shares, or 51 percent of the stock the Canadian miner put up in a rights offering.
Canadian Oil Sands Ltd COS.TO edged down 1.2 percent to C$20.74 after the pipeline company announced after the close on Friday that its second-quarter profit sank 71 percent due to major plant maintenance that reduced production, lower oil prices and higher operating costs. Continued...